Guide to Using Hard Money Lenders in California When You Have Bad Credit

When you find an investment property that you want to purchase, you need to find a lender who can get you the money needed to secure the deal as fast as possible.

But, for the growing number of people with struggling credit scores, finding a lender who will grant a quick loan can be a challenge.

Is your credit keeping you from getting the money you need to make money on investments?

If you have a less-than-perfect credit score, you’re not alone. According to a 2015 survey conducted by VantageScore, around 68 million Americans have poor credit.

As one of the millions of Americans with poor credit, you can still get the funds you need.

Thanks to hard money lenders in California, people with less-than-stellar credit scores are getting investment loans every day.

Read on to find out how you can get a loan even if you have poor credit!

Your Guide to Getting a Loan With Bad Credit

Experian, one of the top credit reporting agencies, estimates that one-third of Americans have poor credit. Their calculations are based on consumers with a score less than 601, which is their standard for differentiating between a fair and poor credit score.

But, Experian doesn’t include the millions more of people in the U.S. that have little to no consumer activity on their reports, which can also affect your score and make it hard to qualify for traditional loans.

With such a large portion of the population unable to acquire funding, it makes it harder for many Americans to make investments that require lenders approval.

Investments, however, could be key in allowing investors to improve their financial situation and raise their score.

Luckily, hard money lenders in California understand the frustration that this predicament causes. These lenders are often able to get you funding even when your credit score suggests otherwise.

How Hard Money Lenders in California Can Help You

When to Seek a Hard Money Loan

There are several times when hard money lenders might be able to get you funding, even when others can’t.

These include:

When You Have Poor Credit

When You Need Cash Fast

When the property won’t qualify for a bank loan (unusual property or in poor condition)

When You Need Funding for Flipping Real Estate

When Purchasing a Home

When You Own Multiple Properties and Need a Loan

When You Have an Existing Loan that Doesn’t Cover Your Financial Needs

As you can see, a hard money loan can be an appropriate option for almost any situation when you need to secure funding but are limited because of your credit score.

What is a Hard Money Loan?

A typical loan uses funding from a non-privatized lending source, such as a bank or credit union. Hard money lenders in California, however, are comprised of nontraditional private lenders and investors.

How a Hard Money Loan is Different than Traditional Property Loans

Traditional property loans rely on a combination of factors to decide who is lent money, and how much money they receive. These factors include a favorable credit score, the property’s condition (that the loan is being used for), and that the applicant’s income meets necessary requirements and can be proven.

A hard money lender only requires that you have enough equity to use as loan collateral. This requirement is most often met using the property that the loan is being sought to cover. However, there are times when the loan may be used to cover other expenses or investments.

Because of the nontraditional requirements of a hard money loan, investors generally find that funding is much easier to acquire than if they had used other, perhaps more typical, lending sources.

Who Do Hard Money Lenders Loan Money to?

If you’ve never used a hard money lender in California for an investment loan before, then you might think this type of funding by lenders is uncommon.

However, the statistics show that a high percentage of people have less than desirable credit scores. This would indicate that many Americans are unable to get funding through traditional methods.

Today’s business owners, investors, and entrepreneurs may face the challenge of poor credit more often than you think.

Studies show that just 25% of the total funding needs of early-stage entrepreneurs comes from credit cards or bank financing. This means that 75% of funding options utilized for their business comes from sources that rely less on their credit rating.

The above statistic would also suggest that many businesses look to non-traditional sources to provide for their company’s financial needs.

A recent article posted on Entrepreneur, the widely-read site for professionals, recommends that business owners and investors who want to raise their credit score for future investments seek opportunities through private loan sources. They also report that using non-bank lenders can be an excellent way to get the capital you need when your credit score is too low to get a prime loan.

How it Works

Just follow the steps outlined by hard money lenders in California. The following are a brief explanation of what’s included in the process:

Complete an Online Application to Lender

Pull Credit Report as Needed

Open Escrow and Order Appraisal if Required

Review Appraisal

Review Title Report

Clear items on Title Report if needed

Submit loan to Investor for approval

Prepare and send Loan Docs to Escrow

Sign loan docs at Escrow Company

Obtain and submit fire insurance to Escrow

Lender wire funds to Escrow

Record documents at recorders office

LOAN IS CLOSED!

The process for a hard money loan is simple, and you could get your money in as little as 7 to 8 days.

Get The Loan You Need Fast!

Has your bad credit score been keeping you from being able to purchase investment property?

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Specializing in originating private money loans in the state of California.

With a network of over 400 private money investors, we’re able to arrange and coordinate the quick funding of real estate loans for transactions which may not qualify through a traditional bank or conventional mortgage lender.
Our services cater to individual borrowers seeking a loan, as well as private investors whom are interested in investing in secured deeds of trust.